Establishing a non-profit organization in Illinois requires several important steps. The non-profit may exist for many purposes, such as charity, education, or religion. The following steps are some of the main steps an organization must take to be considered a licensed non-profit. First the organization must complete certain tasks that are required before a license can be obtained.
According to Illinois law the board members must be established, a name must be chosen, and the mission or purpose must be decided (Illinois Legal Aid, 2010). The non-profit is required to obtain at least three board members and be able to list each by name and correct address (Illinois Legal Aid, 2010). After the name is chosen the non-profit can check to make sure that name is available for use at the Illinois Secretary of State website (Illinois Secretary of State, 2010). The specific purpose of the non-profit is needed before a license can be given. This is usually stated in the mission and/or vision statements.
The first licenses that a non-profit in Illinois must acquire are the incorporation. Some of the information that is required for the incorporation license, other than those listed above, is an address, name of the registered agent, and the person who will receive correspondence for the non-profit (Illinois Legal Aid, 2010). The filling fee for the incorporation form is about 50.00 (Illinois Secretary of State, 2010).
The non-profit will have to obtain a Federal Employer Identification Number (FEIN). This number is needed for taxpayer purposes and is issued by the Internal Revenue Service. The form for the FEIN can be found on the IRS website under the business tab (IRS.gov, 2010). This form can be submitted online, by fax, or by mail (IRS.gov, 2010).
After the non-profit has received the incorporation license and the FEIN, the 501(c)(3) status may be applied for. The 501(c)(3) claims the non-profit as tax exempt. This is an important status in the world of non-profits, making the non-profit exempt from paying federal and state income taxes for the income of the non-profit (Illinois Legal Aid, 2010).More information about the process of filing for this status can be found at the IRS website. The IRS website lists all of the qualifications for this status (IRS.gov, 2010). The non-profit does pay for this status, however, the fee is decided on the income or the projected annual income of the non-profit (Illinois Legal Aid, 2010).
Most important to the non-profit is funding. Before funding can be requested or granted the new non-profit must register with the Illinois Attorney General’s Charitable Trust Bureau (Illinois Attorney General, 2010). The main purpose of this register is for ethical purposes. The attorney general is able to track charities fundraising, financial reports, and other information to ensure every non-profit is operating ethically and by the law. This helps to protect citizens that may use or donate to the non-profit.
Each of these steps will take the non-profit one step closer to becoming an operating non-profit in Illinois.
Illinois Attorney General (2010) Building better charities. Retrieved September 23 , 2010, from http://www.illinoisattorneygeneral.gov/charities/charities_faq.html
Illinois Legal Aid (2010) How to do I create a nonprofit organization? Retrieved September 23, 2010, from http://www.illinoislegalaid.org/index.cfm?fuseaction=home.dsp_content& contentID=4133
Internal Revenue Service (2010) Charities and nonprofits. Retrieved Septembe r 27, 2010, from http://www.irs.gov/charities/index.html
Illinois Secretary of State (2010) Business Services. Retrieved September 27, 2010, from http://www.cyberdriveillinois.com/departments/business_services/home.h tml